State Street’s third quarter results reflected broad-based growth, driven by higher servicing and management fees, as well as progress on strategic initiatives. CEO Ron O’Hanley attributed the company’s performance to disciplined execution and a constructive market environment, noting, “Our strong financial performance reflects disciplined execution against our strategic priorities and our ability to effectively capitalize on the constructive market environment in the quarter.” Management highlighted continued business momentum, with the seventh consecutive quarter of positive operating leverage, and cited robust client flows and product launches as important contributors to these results.
Is now the time to buy STT? Find out in our full research report (it’s free for active Edge members).
State Street (STT) Q3 CY2025 Highlights:
- Revenue: $3.55 billion vs analyst estimates of $3.47 billion (8.8% year-on-year growth, 2.3% beat)
- Adjusted EPS: $2.78 vs analyst estimates of $2.65 (5% beat)
- Adjusted Operating Income: $1.10 billion vs analyst estimates of $1.08 billion (31.1% margin, 2.4% beat)
- Operating Margin: 32.7%, up from 30.1% in the same quarter last year
- Market Capitalization: $32.34 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From State Street’s Q3 Earnings Call
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Alex Blostein (Goldman Sachs) asked about balance sheet management and operating dynamics. CFO John Woods highlighted ongoing optimization efforts, particularly in productivity and technology investment, and noted solid deposit trends supporting net interest margin improvement.
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Glenn Schorr (Evercore) questioned the sustainability of net interest income (NII) trends and client deposit mix. Woods explained that stable deposit levels and reinvestment at higher yields, along with terminated hedges, provide tailwinds for NII into 2026.
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Mike Mayo (Wells Fargo) pressed on State Street’s underperformance versus peers and underappreciated strengths. Woods pointed to fee-based tailwinds, integrated business offerings, and significant productivity opportunities as differentiators that could drive improved shareholder value.
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Ken Usdin (Autonomous) sought clarity on servicing fee backlog installation timing and expense trends. Management confirmed that installation pace is accelerating, with a healthy backlog mix and ongoing productivity initiatives underpinning operating leverage.
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Jim Mitchell (Seaport Global) asked about FX and markets business outperformance and growth outlook. Woods and O’Hanley cited integrated offerings, increased client volumes, and expanded access points as drivers of continued momentum in these areas.
Catalysts in Upcoming Quarters
Our analyst team is closely monitoring (1) the rollout and adoption of State Street’s digital asset and wealth platforms, (2) the pace at which the servicing fee backlog converts to revenue, and (3) continued progress on technology-driven productivity initiatives and operating leverage. The impact of new product launches and evolving client preferences in global wealth and institutional markets will also be important markers of execution.
State Street currently trades at $114.61, up from $112.98 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).
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